Obtaining a good investment property can be quite lucrative for your monetary income and investment portfolio, but finding the perfect investment property can be somewhat challenging. To find the perfect property, many investors turn to off plan buying, an alternative way to acquire a good investment property with less hassle. Read on to learn more about off plan buying and its benefits.
What Is Off The Plan Buying?
Buying an investment property off the plan is purchasing a property that still needs to be built or finishes. When a property investor obtains such a property, they rely on floor plans, price lists and architect drawings, enabling them to make an informed decision before they choose to purchase it.
Why Is Off The Plan Buying Advantageous for Property Investors?
According to IBuyNew, some investors may be sceptical about purchasing a property they have not physically seen, but it actually comes with serious benefits. First of all, your property will be brand new and has never been lived in. This fact is advantageous for the property investor as well as potential tenants, because many Australians prefer to live in a home that has not been lived in before.
Buying investment properties off the plan gives property investors more choice, especially since they can give some of their input during the building process. Property investors can give their input in regard to the floor plans, colour schemes, finishes and other aspects of the building process before the property is finalised. When you purchase a property that is already on the market, you do not get to choose; this often leads to property investors having to make adjustments to a property once they have obtained it.
Of course, one of the most attractive benefits for most property investors is the great reduction on stamp duty that is associated with purchasing an investment property off the plan. For example, when you acquire a $500,000 investment property in New South Wales, you would pay a stamp duty of approximately $18,000. If you are a first time home buyer, you will be exempt from these stamp duty charges. The reduction in stamp duty does vary according to the region the property is situated. In Victoria, you will still pay stamp duty, but it will be reduced by 50%.
Buying an investment property off the plan also leads to a higher capital gain over time. When you purchase your property off the plan, you can be sure you obtain it at today’s price. Once the property has settled, property investors can benefit from big capital gains. Most people believe that these capital gains can only be obtained after a decade, but this is actually far from the truth. Capital gains can be available two years after you have obtained the property. Investors who want to buy and sell can therefore expect a quick turnover from their investment. The amount of capital gain you obtain from your property does depend on the time you purchase. For example, if you purchase off the plan at the bottom of the property cycle, or during a rise, you can enjoy maximum growth from your property.
Purchasing an investment property off the plan also provides great benefits where energy savings are concerned. New properties always have to meet strict energy requirements, which means you do not have to deal with energy problems older properties tend to have. Whether you intend to sell or lease the property, these energy savings are always advantageous.
In conclusion, the majority of benefits provided by off the plan buying relate to the new nature of the property you are buying. New is always better than second-hand, so why not try switching to off the plan buying and see what benefits it could deliver?